REVENUES DOWN FOR ONLINE GAMBLING SOFTWARE PROVIDER
19 June 2009
Chartwell Technology posts Q2 2009 report
Canadian online gambling software provider Chartwell
Technology has posted Quarter 2 2009 results for the
three months ended April 30 2009, showing sharply
declining revenues due to increased competition, tough
economic times and the loss of two licensees.
Management remains optimistic, pointing out in
operational highlights that the company has:
*
Renewed its multi-year contracts with major operators
like Bwin and Eurobet
* Signed two new software
license agreements yet to be announced.
*
Completed the development of three new online casino
games and completed enhancements to three casino table
games.
* Completed software development and
infrastructure construction for its new Games
Distribution System (“GDS”) platform.
Q2 2009
revenue dropped to $4.6 million compared to $7.0 million
for the same period a year earlier. Management reports
that the period over period decrease in revenue was a
result of two single term software licenses which
expired and a general increased level of industry
competition and a weakened economy in key markets.
Total expenses before income taxes were virtually
the same as the second quarter of 2008 as slightly
higher software development and support expenses were
offset by reduced stock based compensation expense.
Net loss for the second quarter was $600 000, a loss
per share of $0.03 as compared to a net income of $1.1
million or $0.05 per share in the same quarter of the
prior fiscal year. EBITDA declined from a positive $2.2
million in the second quarter of fiscal 2008, to a
negative $200 000 in the second quarter of fiscal 2009.
Cash flow from operations before working capital
adjustments declined from $2.0 million in the
comparative quarter to cash used in operations of $100
000 in the second quarter of 2009.
Software
development and support expense was up at $3.1 million
in the second quarter compared to $2.8 million for the
same period of fiscal 2008. The increased expense was
the result of an overall increase in software
development staff focusing on the completion of
Chartwell’s new GDS and on adding new gaming content and
features to the company’s gaming suite.
Chartwell also invested significant time and money in
establishing an Alderney gaming licence, expected to be
granted in the third quarter of fiscal 2009 which will
provide the basis for the launch of the new GDS
platform. The platform represents a software and
hardware platform with the capability to deliver any and
all third-party gaming content and in the most cost
effective manner for traditional operators and database
companies seeking to enter the online gaming market.
Sales and marketing expenses were $700 000 in the
second quarter of 2009 as opposed to $600 000 in the
second quarter of 2008.
Chartwell's Chief
Financial Officer, Alan Richter, commented: “While we
have experienced reduced revenue in fiscal 2009 when
compared to a record quarter in 2008, we are on track to
replace that lost revenue from both new clients we have
signed and from new products and service capabilities
which have been developed and integrated.
"We are
committed to our strategy of improving the depth and
breadth of our product and services offerings and we
believe that our considerable expenditure of time and
resources in those areas will produce positive returns
this year.”
The Company continued to maintain a
strong balance sheet. At April 30, 2009 Chartwell had
$19.9 million of cash and short-term investments
compared to $21.2 million at January 31, 2009.
Online Casino News Courtesy of
Infopowa
More news here.
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